There us no specific limit on number of files, but higher numbers use more memory during our upload process. We have many sites with that many (~45k) files, but 500k would be more than I’d expect to “just work”. Thanks for those stats, they’ll inform that bug report.
As far as things you could try to unblock yourself today, since we won’t be able to investigate more deeply in the immediate future: you might consider trying to deploy subsets on separate sites and stitch them together as described here (you’ll use the same repo, but you can proxy to the second site using the pattern described there: [Support Guide] Can I deploy multiple repositories in a single site?). Suggestion: before trying to set up proxying, try simple deploys of half of your content and see if the deploys complete, since that’s a prerequisite for it being worth your time to try that sharding.